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Non-Bankruptcy Options

Before filing for bankruptcy you need to ask yourself; is there any other way to solve my financial problems?

Some bankruptcy alternatives to consider are:

    » Selling Assets
    » Restructure Your Living Expenses
    » Home Equity Debt Consolidation Loans
    » Consumer Credit Counseling Services
    » Negotiating Easier Payment Terms with your Creditors
    » Do Nothing

The alternatives that you use will depend on your own specific situation. At Genova & Malin, Attorneys at Law, we can help you explore alternatives to bankruptcy. With their 33 years of combined bankruptcy law experience, Thomas Genova or Andrea B. Malin, can give you a sound evaluation of your financial situation, and the best path to take. Here are some thoughts about some of the various alternatives, which we can discuss more fully in a FREE BANKRUPTCY EVALUATION.

Selling Assets
Selling Assets may be a wonderful option if you have assets that you could do without. For example, when your creditors are hounding you, it may be time to sell that spare yacht that you only sail only once every other year on the Hudson River. Or maybe you could cash in some stocks or bonds.

Home Equity Debt Consolidation Loans
Some lenders now will lend up to 125% of the value of your home. This option works particularly well if you have excessive credit-card debt. In some cases, car loans can be included in the consolidation. You will use the money from your home equity loan to pay off in full as many of your other obligations as possible. A benefit of this approach is that interest paid on a home equity loan is probably tax-deductible.

With consolidation, you will have one (hopefully manageable) monthly payment instead of the many monthly payments that you could not keep up with before. Your debt consolidation loan should have a lower interest rate than other loans. (Which isn't difficult, considering the interest rates charged on some credit card debts.

Restructuring Your Living Expenses
After a consolidation loan, or after you've sold some assets to ward off the wolves, it's time to change the spending habits that ran up all that credit card and other debt. If you don't, you will probably be looking at bankruptcy down the line. This is a time to take a hard look at how you are spending your money, and what things you really need in your life. As a wise person once said, "those who do not learn from history, are bound to repeat it."

Negotiating Workouts with Your Creditors
Some creditors would rather get half a loaf, then no loaf at all. They may be willing to negotiate because they realize they may get nothing if you file for bankruptcy. They will probably study your credit report to assess the likelihood of you filing for bankruptcy, especially the possibility of a liquidation bankruptcy under Chapter 7 of the Bankruptcy Code.

Consumer Credit Counseling Services are a possible alternative to bankruptcy
These services in most cases are non-profit organizations (although the people who work for these organizations, and the corporation officers often do very well for themselves!) that will appraise your financial situation and make recommendations. Your credit counselor should review documentation of your income, assets, and debts. If your financial situation is not severe, the credit counselor will then recommend the specific steps you will have to take to solve your problem. If the counselor feels that your situation is too severe for you to be able to remedy yourself a debt repayment schedule will be put into effect. The counselor will inform your creditors of the proposed repayment schedule. When your creditors agree to this schedule you will begin making monthly payments into a special trust fund at the credit counseling services. These monthly payments are then divided up and sent to your creditors. This process continues until all your debts are satisfied.

Do Nothing
Maybe your creditors will just forget all about you, and you won't have to pay them a single penny for as long as you live. Do you believe in miracles? Well, yes, there was that miracle on a hockey rink in Lake Placid a few decades ago. If you are picking up on signs of bankruptcy, better to take action now.

Contact us for a free bankruptcy evaluation.